The impact of trade remedies on the UK construction sector

Most commentators tend to talk about Brexit in binary permutations of hard/soft, deal/no deal, transition/cliff edge. This does a disservice to the enormous decisions the UK must make in the coming months in order to strike out on our own. Not trivialities like a bold new independent policy on the acceptable bend in bananas, but important choices on the fundamental rules under which our businesses will operate.

One area that is largely escaping public discussion is trade defence against unfair imports. It is against the WTO’s rules for producers to dump their products in export markets priced below their domestic prices. It’s up to each WTO member to say how they will enforce these rules, usually through levying extra duties when dumping is proven. At present, the UK’s system is set out in EU regulation and investigations are administered by the European Commission. For nearly a year the Manufacturing Trade Remedies Alliance (MTRA), a coalition of trade associations and unions, has been lobbying for legislation to establish UK ‘trade remedies’.

You may think this is only an issue for manufacturers of heavily traded products such as steel. Indeed, in BCC’s membership it is the UK producers of tableware and tiles who have been most effected by Chinese dumping. However, I believe trade remedies are vital for all construction product manufacturers because of the massive overcapacities that exist in some countries and the subsidised energy costs in others. It is not difficult to see the potential for price-dumping of building products in the future.

The Government’s response has been the Trade White Paper. Sadly, the document contains proposals for innocuously named features like ‘injury based duty’ and an ‘economic interest test’ that actually serve to water down anti-dumping measures. Moreover, the Paper fails to mention how the UK will deal with countries with distorted domestic prices, such as China. MTRA submitted an extensive response to the Government’s call for evidence on the White Paper, but within 24 hours the Government published the Trade Bill. A serious consultation?

The Bill establishes a Trade Remedies Authority, but contains no information on the rules it will implement. For those, we need to wait for the Taxation (Cross Border Trade) Bill rumoured to be published later on today. While the commentariat may be looking for signs on what category of Brexit to expect, MTRA members will be looking more closely at the detail.